The case was brought by federal prosecutors against the utility giant for alleged violations of the Clean Air Act. Federal lawyers contended Alabama Power made major modifications at three of its coal-fired power plants without obtaining a permit or installing modern pollution control devices.

The appellate court ruled that the trial judge wrongly excluded the testimony of two expert witnesses for the government. The court vacated the judgment and remanded the case back to the trial court level.

“This decision is a major win in the fight to clean up the nation’s dirtiest coal plants,” said Keith Johnston, managing attorney for the Southern Environmental Law Center’s Birmingham office.

“It affirms that companies like Alabama Power must consider the increased pollution from their coal plant overhauls, and it underscores the need to reduce that pollution and the harm it does to the American public," he said.

Alabama Power spokesman Michael Sznajderman said the company is reviewing the opinion.

"The very activities that took place at the plants, that were called into question by the Justice Department, were basically routine maintenance and repair projects intended to maintain the reliability of those plants," Sznajderman said.

"We continue to believe in this case we have been essentially falsely accused by the Justice Department and if we have to go to trial to prove the remaining pieces that are still out there, we are prepared to go forward," he said.